Excitement over a potential Spot Bitcoin ETF approval is growing in the crypto ecosystem, but Arthur Hayes is not convinced that such an event would be a good thing for Bitcoin or the people who use it. do not have.
The crypto industry OG and founder of the Maelstrom Fund said that institutional interest in Bitcoin “could end up leading to situations that are actually undesirable.”
Talk to Blockworks on the On the Margin podcast (spotify/apple), Hayes envisions the following hypothetical scenario: [traditional finance] The guys come and collect the bulk of the freely traded Bitcoins [BTC] It’s in circulation. ”
He said the same institutional group could launch a Bitcoin mining ETF, adding that “BlackRock is the largest shareholder in some of the largest mining operations.”
Hayes warns that asset managers like BlackRock are effectively “agents of the state.” “They act according to the orders of the state.”
Mr. Hayes argues that if a state requires its citizens to “sit in a fiat banking system” in order to tax them through inflation to pay off ever-increasing debts, it is They argue that it makes sense — to hold money in an ETF vehicle.
In such a system, Hayes argues: It’s a financial asset. It’s not the actual Bitcoin itself. ”
“You had fiat currency and you bought this derivative,” he explains. “An asset manager goes and buys Bitcoin and deposits it with a custodian, where it is kept.”
“If the BlackRock ETF gets too big, it could actually kill Bitcoin, because it’s just a bunch of stationary Bitcoin sitting there,” he warns.
Would you trade today’s sugar high for tomorrow’s disaster?
Additionally, Hayes warns that by controlling a large portion of the miners, the same organization could increase its control over the network’s consensus mechanism.
He says traditional financial institutions don’t necessarily align with certain upgrades that may be needed for Bitcoin to remain a “solid cryptocurrency asset,” particularly when it comes to encryption and privacy. .
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“So will they support it?” he asks. “An open question. I don’t know, but that’s what happens when you have large passive investors.”
Hayes said Bitcoin is the antithesis of state power and “exists for our people, the people who can send money around the world.” But for the most part, he wonders aloud what would happen if he were placed under the control of one or a few institutions.
Of course, if Bitcoin becomes more popular, Hayes says there is no doubt that it will be worth the legal price. “But will that actually be great for Bitcoin’s utility?”
“You know, are we getting high on sugar today just to cause a massive disaster in the future? I don’t know.”
Hayes says people need to think long-term about this issue. “Yes, I get it. ETFs come out and prices go up for whatever. But what’s the end result when one institution owns this much cryptocurrency?”
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